America's commitment to housing

July 5, 1984

It hardly takes a reminder from the US government that homeownership is getting more and more costly. Just ask any young family today contemplating their first home, what with fixed interest rates in the 14 percent range and climbing.

If mortgage rates are not enough of a challenge in considering today's housing market, take the issue of overall prices. Last week the federal government announced that for the first time in United States history, the average price of a new house has topped - are you ready for this? - $100,000. In fact, $101,000 - an increase of $5,100 since April of this year.

Congress and the White House need to take firm action to ensure that the goal of homeownership remains a possibility for the American people. Homeownership has played an important role throughout US history, from the small, self-sufficient farms of colonial America to the Homestead Act settlements of the 1860s (160 acres, at the nominal sum of 25 cents an acre), to the Veterans Administration tract houses of the late 1940s. Homeownership provides a sense of stability for American society - linking families to neighborhoods and communities.

Thus, it can only be disconcerting to read that the share of Americans who own homes has now declined for the first time in at least 20 years. According to the US Census Bureau, the share of households owning homes dropped from 65.6 percent in 1980 to 64.6 percent in 1982. That decline of 1 percent represents over one-half the actual gain in home ownership made during the entire decade of the 1970s.

Admittedly, the US housing situation is complex. Mortgage rates and prices are only two factors. Urban problems (blight, crime, closing of factories) all affect housing.

The larger challenge, however, is matching most Americans with a home that is reasonably priced in a neighborhood that offers the needed amenities - including good schools.

This page, in the past, has noted practical steps that could be taken to make more housing available at affordable prices: bring down budget deficits to ease interest rates; end discriminatory and exclusionary zoning and land-use laws; provide state financial support for lenders at special low-interest rates to be used for first-time buyers; encourage construction of ''echo housing'' (homes built behind existing homes) or ''cluster communities'' (smaller homes in subdivisions) - both housing alternatives for older persons. And so forth.

What seems most needed, however, is a renewal of political and social commitment for the ideal of homeownership in general. Today's housing solutions will differ from the solutions of the 1940s and 1950s. Smaller homes are now needed, given smaller families. Condominiums. High rises. And there are new financing mechanisms available such as variable-rate mortgages. But the crucial element remains the need for decisive political commitment.